Flora trading as Flora Constructions v Budget Demolition & Excavation Pty Ltd

Flora Trading, trading as Flora Constructions, filed a lawsuit against Budget Demolition & Excavation Pty Ltd. The plaintiff alleged that the defendant breached a contract for demolition services, resulting in a loss of profit. The Federal Circuit and Family Court of Australia was tasked with deciding the dispute. The court was required to determine whether the defendant had indeed breached the contract, and if so, the appropriate measure of damages. Additionally, the court needed to assess whether any loss of profit claimed by the plaintiff was a foreseeable consequence of the breach.

The court found that the defendant had indeed breached the contract by failing to complete the demolition work within the agreed timeframe. The breach resulted in the plaintiff suffering a loss of profit as they were unable to proceed with subsequent construction works. The court considered the principles of contract law, including the foreseeability of loss and the need to mitigate damages. The plaintiff's loss of profit was deemed a foreseeable consequence of the breach. The court assessed the loss of profit by considering the difference between the contract price and the cost of alternative demolition services procured by the plaintiff. The court concluded that the plaintiff was entitled to recover the difference as damages.

The court ordered the defendant to pay the plaintiff an amount equivalent to the loss of profit, minus any costs incurred by the plaintiff in mitigating the loss. The defendant was also ordered to pay interest on the amount owed. The court emphasised that the purpose of awarding damages is to place the non-breaching party in the position they would have been in had the contract been properly performed.